Bank Nifty & Nifty Technical Analysis for 19 July’13

Nifty as on 18 July’13– 6038.05 (+64.75)    Bank Nifty as on 18 July’13– 11187.70 (+216.10)

Clouds are clear???

It was real relief day for traders, Nifty opened at 5985 and stayed above 5975 levels. We were expecting surprise, surprise of gains. It seems that recovery in banking stocks came to support in last hour of trade, and Nifty and Bank Nifty moved higher. Incidentally, Nifty gave close exactly at 6038, wherein it turned on last Monday.

Now, you have a reason to cheer, but still we advise you to be stay cautious and look for today’s close, don’t forget, its Friday. We are scaring you, but asking you to stay alert, because moving down from 6038 can prove as valid double top. To continue this rally, we need to see close above ~6050 levels, which can take prices to next level of 6100. And you never know, in today’s session only you might see this level.

Nifty Trading Strategy

Today’s open and continuation of trend will decide future course of action. Move above 6050 opens door for 6100/6130. Keep stop loss of 6040 strictly. Even don’t jump to buy options.

Be prepared for worst case scenario, If Nifty opens gap down then- if you are aggressive trader than go short in Nifty with stop loss of 6050, don’t compromise with this level.

Bank Nifty Trading Strategy

It seems that Bank Nifty has negated the setup of steep fall, at least for time being, you never know what happens next. According to our understanding, as long as Bank Nifty holds 11000 level, we can keep hope or revival. Yes, still Bank Nifty is not totally out of danger. We are expecting close above 10250 level.

If Bank Nifty moves above 11250 levels, then it is time to build minor long position in Bank Nifty, with stop loss of 11000. From past experience, you must have learnt that Bank Nifty is highly volatile, so time & again we reiterate that don’t over leverage your position at least in Bank Nifty. Below, 10900 Bank Nifty opens big space.

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